New York ? The nation’s factories, plants and utilities expanded at a faster pace in June, suggesting hardy consumer spending is boosting confidence among manufacturers even as prices for raw materials rise.

The Institute for Supply Management said Monday that its manufacturing index rose to 56 in June. The reading marked the fifth consecutive month of growth for the manufacturing sector and the 68th consecutive month of growth for the overall economy.

The reading was above the May reading of 55 and higher than the market expectation of 55.4.

A reading above 50 indicates growth while a reading below 50 indicates contraction.

New orders, production and employment powered growth, while inventories continued contraction.

Prices for nearly all raw materials – including aluminum, chemicals, gasoline and steel – continued climbing, although at a more moderate pace than the previous month. The index for prices paid was 68 in June, down from 71 in May.

“It remains elevated, but it’s not raising red flags,” said Ryan Sweet, an economist with Moody’s Economy.com.

Investors worried about inflation were closely watching for a spike in the prices manufacturers paid for raw materials. Federal Reserve officials say the biggest risk to the economy is if inflation fails to recede.

Out-of-control inflation can eat away at paychecks, investments and standards of living. That could dampen American consumers’ spending, which has been an engine for growth in the global economy.

A measure tied to the government’s income and spending report showed last week that “core” prices moderated in May. While the moderation was encouraging, analysts say a trend hasn’t been established that costs are under control.

The ISM reported the top performing industries in June were petroleum and coal products; chemical products; plastics and rubber products; food, beverage and tobacco products; nonmetallic mineral products; computer and electronic products; paper products; fabricated metal products; primary metals; miscellaneous manufacturing; textile mills; and machinery.

“Following a weak first quarter, the manufacturing sector rebounded in a strong fashion during the second quarter,” said Norbert J. Ore, chair of ISM’s survey committee.

The strength of the new orders and production suggests that growth appears sustainable throughout the third quarter, Ore said.

The ISM report is just the latest sign that the U.S. economy may be recovering from a recent slowdown.

Belt tightening by businesses worried about the effects of the slumping housing and automotive industries was a major factor behind the first-quarter’s economic slowdown. The economy barely moved from January to March, growing at the weakest pace in more than four years.

Analysts expect the economy to bounce back in coming quarters.